The most crowded trade for June

Long big tech is currently the most crowded trade amongst global institutional investors according to the widely followed BofA Global Fund Manager Survey. It has not escaped to any portfolio manager that most of the performance of the S&P 500 this year was driven by a few big tech names. The irresistible rise of Artificial Intelligence as an investment theme and the defensiveness of big tech earnings in a slowing economy explain most of investor’s appetite for these stocks. While the rise and adoption AI is fast and furious, a crowded trade like long big tech will inevitably come under pressure the moment that the environment slightly changes ( think for example central banks change course ). At ECP, we continue  to invest in quality companies that present undervalued earning power and are not blindly following the hype.